Head to Head Analysis: Cathay General Bancorp (NASDAQ:CATY) versus United Security Bancshares (NASDAQ:UBFO)

United Security Bancshares (NASDAQ:UBFO) and Cathay General Bancorp (NASDAQ:CATY) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.

Analyst Ratings

This is a summary of current ratings and price targets for United Security Bancshares and Cathay General Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Security Bancshares	0	0	0	0	0.00
Cathay General Bancorp	1	4	2	0	2.14

Cathay General Bancorp has a consensus target price of $49.71, indicating a potential upside of 0.15%. Given Cathay General Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Cathay General Bancorp is more favorable than United Security Bancshares.

Earnings & Valuation

This table compares United Security Bancshares and Cathay General Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Security Bancshares	$65.46 million	2.54	$14.78 million	$0.66	14.44
Cathay General Bancorp	$1.39 billion	2.47	$285.98 million	$4.14	11.99

Cathay General Bancorp has higher revenue and earnings than United Security Bancshares. Cathay General Bancorp is trading at a lower price-to-earnings ratio than United Security Bancshares, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

United Security Bancshares has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500. Comparatively, Cathay General Bancorp has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.

Profitability

This table compares United Security Bancshares and Cathay General Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Security Bancshares	17.07%	8.43%	0.92%
Cathay General Bancorp	21.44%	10.39%	1.27%

Insider & Institutional Ownership

30.9% of United Security Bancshares shares are held by institutional investors. Comparatively, 75.0% of Cathay General Bancorp shares are held by institutional investors. 22.1% of United Security Bancshares shares are held by insiders. Comparatively, 4.9% of Cathay General Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

United Security Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 5.0%. Cathay General Bancorp pays an annual dividend of $1.36 per share and has a dividend yield of 2.7%. United Security Bancshares pays out 72.7% of its earnings in the form of a dividend. Cathay General Bancorp pays out 32.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. United Security Bancshares has increased its dividend for 2 consecutive years. United Security Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Cathay General Bancorp beats United Security Bancshares on 12 of the 17 factors compared between the two stocks.

About United Security Bancshares

United Security Bancshares operates as the bank holding company for United Security Bank, a state-chartered bank that provides a range of commercial banking services to the business and professional community, and individuals in California. The company accepts various deposit products, including personal and business checking accounts, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit. It also provides real estate mortgage, commercial and industrial, real estate construction and development, and consumer loans, as well as agricultural, installment, and student loans. In addition, the company offers online and mobile banking, safe deposit boxes, wire transfers, payroll direct deposit, cashier's check, cash management, and foreign draft services, as well as interactive teller machines; and person-to-person and bank-to-bank transfers for consumer customers. United Security Bancshares was founded in 1987 and is headquartered in Fresno, California.

About Cathay General Bancorp

Cathay General Bancorp operates as the holding company for Cathay Bank that offers various commercial banking products and services to individuals, professionals, and small to medium-sized businesses in the United States. The company offers various deposit products, including passbook accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, and public funds deposits. It also provides loan products, such as commercial mortgage loans, commercial loans, small business administration loans, residential mortgage loans, real estate construction loans, and home equity lines of credit, as well as installment loans to individuals for household, and other consumer expenditures. In addition, the company offers trade financing, letter of credit, wire transfer, forward currency spot and forward contract, safe deposit, collection, automatic teller machine, Internet banking, investment, and other customary bank services, as well as securities and insurance products. Cathay General Bancorp was founded in 1962 and is headquartered in Los Angeles, California.